American Institute for Economic Research, June 18, 2020

D.C.’s Iron Curtain of Secrecy Endangers The Economy and Everything Else

by James Bovard

The Trump administration is threatening to sue John Bolton for unauthorized disclosures in his new book dishing dirt on Trump from their private discussions when Bolton was National Security Advisor. Bolton, who has a long history as a slippery warmongering fanatic, signed a Non-Disclosure Agreement and the Trump administration claims he violates it. The uproar around Bolton’s book should awaken Americans to the Iron Curtain around the federal government, shrouding everything from economic policy to the furtive plans for toppling foreign regimes.

The federal government is creating trillions of pages of new secrets every year. The total number of new secrets each year is equivalent to “20 million four-drawer filing cabinets filled with double-spaced text on paper,” the Washington Post reported. If those filing cabinets were laid end to end, they would stretch almost to the moon. The feds have accumulated the equivalent of hundreds of pages of secrets for each American household, blighting any hope for citizens to learn of their rulers’ rascality.

Since the 1990s, the number of classified documents annually created by federal agencies increased more than tenfold. In 2004, Rep. Chris Shays (R-Conn.) derided the federal classification system as “incomprehensibly complex” and “so bloated it often does not distinguish between the critically important and the comically irrelevant.” The New York Times reported in 2005 that federal agencies were “classifying documents at the rate of 125 a minute as they create new categories of semi-secrets bearing vague labels like ‘sensitive security information.’” That last category is a favorite of the Transportation Security Administration, which works overtime to prevent Americans from learning the official rationales for squeezing their butts and boobs at airport checkpoints.

The same secrecy default that is entangling Bolton’s book is also covering up the names of companies and nonprofits that have received more than $500 billion in Paycheck Protection Program loans. Treasury Secretary Steven Mnuchin announced this week that the Trump administration will refuse to disclose the names of the recipients of PPP windfalls because the loan amounts are “proprietary” and “confidential.”

The Trump administration double-crossed both Congress and the media, since officials had previously pledged to disclose the information. As the Associated Press reported, “Asked previously by news organizations for information on the companies receiving loans, the Small Business Administration has said it’s too consumed by the urgent effort of helping small businesses through the economic downturn to provide the data. It said specific loan data may be released ‘in the near future.’” “Spending so fast we can’t explain what we are doing” is not a reassuring defense for the SBA, which has been notorious for almost half a century for boondoggles and favoritism.

As Rep. Ben McAdams (D-UT) commented on Mnuchin’s secrecy dictate: “What part of ‘it’s taxpayer money’ does he not understand?” The list of nonprofit aid recipients could be especially inflammatory. Sen. Josh Hawley (R-MO) complained, “As far as we know, Planned Parenthood has taken $80 million in taxpayer money straight to the bank. It’s unacceptable and I won’t stop until I get answers.”

The power of the Federal Reserve has soared during the COVID crisis but average Americans don’t have a snowball’s chance in hell of learning the details of the Fed’s favors until long after insiders take their profits. As Kurt Schacht of the CFA Institute, the world’s largest association of investors, observed, “The Federal Reserve has quickly moved from being the lender of last resort for banks to what many feel is a lender of last resort to the entire U.S. economy…. Between Congress and the Federal Reserve, the government has committed more than $6 trillion to sustain the U.S. economy, an astounding price tag that surpasses all economic stimulus funding since the Great Depression.”

President Trump acts as if his COVID corporate handouts are entitled to total secrecy.

Trump also purged the Inspector Generals on the Pandemic Response Accountability Committee, which was supposed to oversee how federal funds were spent. Perhaps that will prevent Americans from learning whether the corporate relief policies are as incoherent and contradictory as the administration’s advice on wearing masks. Every president since Bill Clinton has helped gut the federal Freedom of Information Act, so that will provide little or no help in exposing COVID bailout racketeering.

Secrecy may be shrouding Trump effectively spending trillions of tax dollars for his reelection campaign to rev up the economy. The Treasury Department has a webpage warning people that if they receive emails “claiming to be from the Treasury Department and offering COVID-19 related grants or stimulus payments in exchange for personal financial information… please do not respond. These are scams.” Unfortunately, it is not a “scam” when financial insiders or corporations get secret benefits in return for campaign contributions to Trump or congressional wheeler-dealers.

COVID bailouts will likely remain secret until long after major economic damage is done. Attorney General Ramsey Clark warned in 1967, “Nothing so diminishes democracy as secrecy.” Earlier this year, federal judge Amy Berman Jackson declared, “If people don’t have the facts, democracy doesn’t work.”

But Republicans and Democrats in Washington have long since conspired to deny Americans the facts millions of times a year. If democracy depends on transparency, and government transparency is an illusion, then what is U.S. democracy? Unfortunately, secrecy and lying are often two sides of the same political coin.